Apr 16 2012 |
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Yemen’s Ailing Economy To Receive Further IMF Aid
Yemen’s Ailing Economy To Receive Further IMF Aid
The International Monetary Fund (IMF) has approved a proposal to lend an amount equivalent to $93.75mn in Special Drawing Rights (SDR) to Yemen to help the poorest member of the Arab League plug its ever-worsening balance of payments deficit. SDRs are international reserve assets, defined and maintained by the IMF to supplement its member countries’ official reserves. In a statement earlier this month, Deputy Managing Director of the IMF’s Executive Board Nemat Shafik said the amount would be disbursed with immediate effect to support the Yemeni recovery program following a prolonged period of political turmoil. “A year long political crisis and civil unrest have taken a serious toll on the Yemeni economy, endangering the humanitarian situation,” Ms Shafik said. “Economic activity fell sharply in 2011… Damage to a key pipeline – which carries one third of the country’s oil production – has exacerbated the situation, prompting the government to compress public investment,” she continued, stressing economic recovery in the country was expected to be slow.
Neglected for decades by former president Ali 'Abd Allah Salih, the country’s economy was already in very bad shape prior to the Arab Spring related unrest that began in early 2011. It was this unrest however which has ultimately helped send the Yemeni economy into freefall. Repeated tribal attacks on the country’s oil and gas infrastructure (MEES , 9 April) meanwhile have made it increasingly expensive to both produce and transport food in Yemen, forcing the authorities to increase dependence on fuel imports from abroad, in turn nearly doubling the country’s monthly import bill. Yemen is today considered to be the poorest country in the Arab world, with an estimated GDP per capita of around $2,500 according to the latest edition of the CIA World Factbook.
© Copyright MEES 2012.
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